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Etihad Airways’ Rapid Growth Frustrates Rivals

How Etihad runs and is financed is central in a fight with airlines in the United States, which accuse Persian Gulf carriers of stealing passengers.

ABU DHABI — Emerging from the desert like some giant steel squid, the organic forms of Abu Dhabi’s new airport terminal are starting to take shape.

The existing airport has become too small for the ambitions of its main tenant, Etihad Airways, the smallest and fastest growing of the three giant Middle Eastern airlines, whose expansion has sown resentment among the legacy carriers of North America and Europe.

Etihad flight attendants demonstrate different situations at the airline's training academy. Each week, up to 100 new trainees graduate from the six-and-a-half-week course. (Christophe Viseux for The New York Times)

For more than a decade, the Persian Gulf airlines have transformed international travel, focusing on an obsession with service and single-hub connections. They now fly to more foreign destinations and have more international seats than United States carriers.

Now, how Etihad operates — and especially how it is financed — has become a critical issue in an increasingly contentious battle with airlines and unions in the United States, which accuse the gulf carriers of stealing passengers with the help of generous government support.

A highly public rift erupted last month, when the chief executives of Delta Air Lines, American Airlines and United Airlines met with senior government officials to argue that flights from the Persian Gulf airlines into the United States should be scaled back. The effort represents a rare attack against open skies policies that the United States and its airlines have promoted around the world for years.

Etihad is particularly exposed to criticism given how fast it has grown since it was founded in 2004. It now has more than 100 planes and flies to 110 destinations, including São Paulo, Brazil, Johannesburg and New Delhi. By 2017, the sprawling $3 billion new airport here will have an annual capacity of 30 million passengers — as much international traffic at New York’s Kennedy airport today — mostly driven by Etihad.

Passengers in coach are given pillows that can split open to serve as headrests. Night masks have a red or green side, depending on whether passengers want to sleep or be awakened by flight attendants at mealtime.

“There is an advantage of having no legacy,” said Peter Baumgartner, the airline’s chief commercial officer.

One recent morning, traffic was dense with dozens of flights departing to places like Hyderabad and Chennai, in India; Chengdu, China; Ho Chi Minh City, Vietnam; Muscat, Oman; and Bangkok. None of those cities are served directly by an American airline out of the United States.

Ultimately, Mr. Horton said, Etihad is simply capitalizing on an opportunity. Delta and United do not fly to Abu Dhabi, and only offer one flight each to the vibrant commercial and touristic hub of Dubai. American Airlines has none.

“If we look past all the rhetoric,” Mr. Horton said, “at the end of the day what the Gulf carriers do is transport passengers to markets U.S. airlines and their existing partners cannot adequately serve.”

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Source: The New York Times (1551 Articles)
Written by Jad Mouawad